City budget shortfall: $3.5 million

The city of Topeka needs to reduce its operating expenses for this calendar year by $3.5 million to deal with a budget shortfall of that amount, city manager Norton Bonaparte said Tuesday.

Bonaparte shared the news in an e-mail sent to all city employees.

To help address its financial situation, he wrote that the city was putting a hold — effective immediately — on $1.55 million earmarked in the 2010 budget for vehicle replacement and repairs to facilities and equipment, with only emergency building repairs being approved.

Bonaparte told the city council's policy and finance committee Tuesday afternoon that he planned by the first week in May to bring before the council a proposed strategy to cut general fund costs for this year by $3.5 million to stay within the 2010 budget the council approved in August. The general fund part of that budget totaled about $82.6 million.

Tuesday's meeting was scheduled by Councilman Bob Archer, chairman of the policy and finance committee, to focus on what he described as the "dire straits" the city faces financially. Committee members Archer, Deborah Swank and Richard Harmon and fellow council members Jack Woelfel, Karen Hiller and Jeff Preisner attended the meeting. No official action was taken.

City finance director Jim Langford told those on hand the city's general fund saw a $1.7 million shortfall for 2009, when revenues were about $1.1 million less than was budgeted for while expenditures were about $600,000 more. The city made up for the shortfall using money from its general fund ending balance, a contingency fund containing money the city plans to have left over at the end of each budget cycle.

But Langford and Bonaparte said the city this year faces a $3.5 million general fund shortfall, resulting from:

— $1.5 million in anticipated revenue lost when the city recently opted to lower its estimate for this year's sales tax revenue from $28.1 million to $26.6 million, which Langford said is close to the city's total for 2009.

— $1.5 million in anticipated savings that won't be realized due to the city's inability to carry out plans made in crafting the 2010 budget to save $3.6 million — $1 million by eliminating jobs and $2.6 million in "vacancy credits" that would be realized by leaving existing vacant jobs unfilled long enough to save that amount in salaries and benefits the city would otherwise pay out. Bonaparte said that while the city this year has made about $1.1 million in job cuts, it will only be able to generate perhaps $1 million in vacancy credits because fewer positions are becoming vacant. City employees in recent months have increasingly been holding on to their jobs, Langford said.

— $500,000 that was to be transferred to the general fund from other funds but "did not materialize," according to Bonaparte's e-mail. Langford said that money, which had been in zoo and parks and recreation funds, had to be used to cover unforeseen expenses that included complying with a federal mandate requiring all swimming pools to have special drains.

Bonaparte told council members Tuesday that the city needs to make additional, permanent cuts to stay within the 2010 budget. He said he is working to do that.

He said that in addition to the hold he placed on vehicle replacement and facility repairs, city officials were "in discussions" about cutting other, unspecified big-ticket costs.

Bonaparte stressed in the e-mail that he has established a city operations and services team consisting of city staff members who are looking at how the city can cut costs while continuing to provide essential services.

Langford said the team was asked to find ways to cut city costs by roughly $1.5 million to $2 million.

He also indicated city officials plan to meet Thursday with leaders of unions representing city employees to encourage their collaboration.

Swank said she hoped the city would look at ways to raise revenue as well as reduce expenses.

Langford and Archer said the financial challenges the city faces present an opportunity to improve its operations.

"We're all in this together," Archer said.

Tim Hrenchir can be reached at (785) 295-1184 or tim.hrenchir@cjonline.com.

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